Bowers says Shoop, Davis should be out of investment firm bids

July 16, 1998|By BRENDAN KIRBY

Washington County Commissioner Ronald L. Bowers said Wednesday he does not want County Administrator Rodney M. Shoop and Human Resources Director Alan J. Davis to play a role in the search for a company to manage the county's $31 million pension fund.

The commissioners voted on Tuesday to cancel the last two years of a three-year contract with INVESCO Capital Management Inc. and seek new proposals.

INVESCO arranged for Shoop, Davis and Commissioners President Gregory I. Snook to attend the prestigious Masters golf championship last year.

Shoop said Wednesday that the process for selecting a company will be the same as the one used last year. He said neither he nor Davis will play a direct role in the process because of the appearance of impropriety.

As was the case a year ago, Shoop said county Purchasing Agent Karen R. Luther will develop a request for proposals and select a panel of advisers with financial expertise to consult on the project.

Advertisement

Bowers said Davis conducted a pre-bid conference last year.

"I do not want anyone who went to that golf tournament handling anything in this process," he said.

Davis could not be reached for comment.

Commissioner John S. Shank said he does not think Davis and Shoop should necessarily back out of the bidding process because there is nothing they can do to influence the commissioners' decision.

"All they can do is give whoever's bidding information. They better give everyone the same information," Shank said.

Bowers said his main concern is that there is a fair and open bidding process that gives all companies an equal shot at the contract.

When the county selected INVESCO last year, Bowers said officials relied on the advice of Jim Stahl, an investment adviser from BGS&G. He recommended INVESCO based on the company's track record, even though the firm's bid was not the lowest.

Bowers said BGS&G competes with Wheat First Butcher Singer, which offered to manage the pension fund for $130,000 less than INVESCO.

Stahl could not be reached for comment on Wednesday. Rick Harshman, manager of BGS&G's Hagerstown office, said in a letter that his company was chosen to review the contract proposals precisely because it is in the business.

"We were not biased; we did not have a vested interest in the outcome. Why would we recommend something to the detriment of a valued customer?" he wrote. " Remember, INVESCO is also a competitor of BGS&G."

Shank said he had no reason to believe BGS&G's advice was tainted.

Bowers said he also faulted last year's process because local banks were not invited to bid on the contract.

"It was wrong, totally wrong," he said. "It's time to clean it up and move on."

Shoop said the county advertised the contract and accepted bids from any interested firm.

Under INVESCO's management, the county's pension fund rode a rapidly expanding stock market last year, jumping from $22.4 million to $27.8 million.

Since then, the fund has grown to $31 million.

That growth prompted Shank on Tuesday to support Bowers' motion to re-bid the contract. He said he thinks the county might be able to negotiate lower fees now that the size of the fund is much greater.